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Not even a soft ADP employment report could stop this market from continuing to advance on Wednesday. And now, the major indices have all started the month of August with three straight days of gains.
The Dow took the lead today by rising 1.39% (or about 373 points) to 27,201.52.
Disney (DIS) was a big help by jumping 8.8% after last night’s third-quarter report, which included a surprise profit of 8 cents despite all its coronavirus challenges.
The entertainment giant surprised by more than 118% and boasted 100 million subscribers across its streaming platforms.
The S&P was up 0.64% to 3327.77. This index and the Dow have four-day winning streaks each.
The NASDAQ participated in this solid day with an increase of 0.52% (or about 57 points) to 10,998.40. The index briefly surpassed 11,000 on Wednesday and still finished with a third straight closing high. It has also gained for the past six sessions.
So the ADP employment report was a disappointment. The private sector added only 167,000 jobs last month, which was way off expectations of more than 1 million. It was also down sharply from last month’s more than 4 million.
The market didn’t mind very much. This report traditionally comes before the big government employment situation, but doesn’t have to be a bellwether.
Meanwhile, the ISM services report was solid, rising to 58.1 in July. (Anything over 50 indicates expansion.) The result beat expectations of 55 and improved upon last month’s 57.1.
And we’re still waiting for Congress to find some common ground on the next coronavirus relief package. The market isn’t too concerned about this right now either, since we’re all pretty sure that something will eventually get done.
However, the market can change in an instant. In other words, it can shrug off these delays for a while… and then suddenly decide to care and move sharply lower if people don’t get the help they need.
So hurry up, Washington!
Today's Portfolio Highlights:
Blockchain Innovators: Shares of WISeKey International (WKEY) just keep going up, but Dave doesn’t mind doing a little chasing in this portfolio. This cybersecurity company deploys large scale digital ecosystems for those using blockchain, AI and the Internet of Things. It recently created an app that allows users to upload and certify the results of their coronavirus test, which the company believes can be used to facilitate international travel. The editor added WKEY on Wednesday, while also selling 360 Finance (QFIN) for a 36.7% return in a little over three months. Read the full write-up for more on today’s moves. By the way, this portfolio now has four of the top five best performers among all ZU services over the past 30 days. Those winners include Advanced Micro Devices (AMD, +59.8%), iClick Interactive (ICLK, +47.4%), PFSweb (PFSW, +45.8%) and eXp World Holdings (EXPI, +41.4%).
Counterstrike: The market’s reaction to a quarterly report can be unpredictable… even if a stock beats earnings expectations. Therefore, Jeremy decided to sell half of Turtle Beach (HEAR) on Wednesday to reduce risk ahead of its report coming tomorrow. The move brought a return of 15.9% in about three weeks. The editor will hold onto the other half through the print and manage it from there. Meanwhile, the portfolio also sold all of Workday (WDAY) for a 3.4% return in two months. Read the full write-up for more.
Surprise Trader: It’s not a bad idea to own a stock like PGT (PGTI) during hurricane season. This company is the nation’s leading manufacturer and supplier of residential impact-resistant windows. It beat by more than 115% in its most recent quarterly report, and has a positive Earnings ESP of 0.5% for the one coming up before the bell on Wednesday, August 12. If PGTI beats again, it would be the third straight positive surprise. Dave added this Zacks Rank #1 (Strong Buy) on Wednesday with a 12.5% allocation. The editor also sold Turning Point Brands (TPB) for a 4.15% return in 2 weeks. See the complete commentary for more on today’s moves. In other news, this portfolio had a big winner today as JELD-WEN Holdings (JELD) rose 11.2% after its quarterly report.
Home Run Investor: Last week, Comfort Systems (FIX) reported second-quarter earnings that beat the Zacks Consensus Estimate by more than 237%! It was the company’s third positive surprise in the past four quarters. FIX is a national provider of comprehensive HVAC installation, maintenance, repair and replacement services. Rising earnings estimates have made it a Zacks Rank #1 (Strong Buy), and Brian thinks its valuation is “great”. The editor also sold the underperforming Rambus (RMBS) to make room for FIX. Read the full write-up for more on today’s action.
Have a Great Evening,
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